Canada Factory Activity Continues to Shrink

The S&P Global Canada Manufacturing PMI experienced a decline in November, dropping to 48.4 from 49.6 in October. This marks a modest downturn, extending the sector's contraction for the tenth consecutive month. The rates of decline in both output and new orders accelerated, as uncertainties in the market and sluggish demand continued to impact activity. Additionally, new export orders fell for the tenth month in a row, with tariffs and unpredictable trade policies acting as significant constraints, affecting export sales and leading to subdued purchasing behavior. Employment witnessed a slight decline, as companies generally opted not to replace departing employees, resulting in reduced workforce numbers for the tenth month in succession. Input cost inflation reached its lowest point in over a year, and the inflation rate for selling prices similarly decreased. Looking to the future, while confidence remains positive, it is historically low due to the persistent unpredictability of trade policies affecting the industry's outlook.

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